PepsiCo: Stop Overthinking

PepsiCo (PEP) is a great investment and is headed higher. Despite what sell side analysts trying to invoke fear will say, PepsiCo is a great investment.

The issue most investors have, is that they lose site of the real reason they buy a stock like PepsiCo in the first place. Short-term desire clouds judgment. PepsiCo is a wide-moat consumer packaged goods company with distribution channels comparable to only Coca Cola (KO) and Mondelez (MDLZ); let us remind you why you should be a buyer of PepsiCo on any weakness.

Just take a look at PepsiCo’s chart:

In the simplest method of technical analysis, take a look at the chart above. Since 2010, how often has PepsiCo looked severely overextended past its moving averages? I’ll answer that question for you, hardly ever. Since 2010, PepsiCo has been on a tear delivering over a 100% return in stock price alone, without factoring the consistent dividend that has been increased for 44 straight years.

We use PepsiCo to bring balance to our portfolio. It is a defensive position to deliver consistent dividend income and safe growth quarter after quarter. Instead of sitting on a lump sum of cash, we would rather have a position in PepsiCo where we can get a consistent return without the risk exposure of a growth stock.